Pick n Pay has officially announced that it is slashing management jobs through a voluntary severance programme and Section 189 retrenchment process.
The SABC first reported the planned job cuts on 14 April 2023. It said over 1,000 managers at Pick n Pay stores were served with possible retrenchment letters.
The SABC said, “Pick n Pay has denied that it’s retrenching workers and that it’s undertaking restructuring at its stores”.
When Daily Investor asked Pick n Pay to comment about its planned retrenchments, the retailer would not confirm the job cuts.
Instead, it said it was “removing roles which are no longer required and investing in new roles that provide greater service and flexibility”.
However, the company has now officially confirmed the planned job cuts in its annual financial statements for the 52 weeks ended 26 February 2023.
Pick n Pay said it commenced two new “Project Future staffing initiatives” in March which impact the entire group.
- A voluntary severance programme (VSP) aimed at delivering targeted benchmarks in terms of support office and store-level efficiency gains.
- A modernisation of Pick n Pay Junior Store Management structures to reflect changing customer and operational needs, increase efficiency, and deliver better customer service. It is anticipated that some roles are likely to be lost through an S189 retrenchment process.
Section 189 of the Labour Relations Act permits employers to dismiss employees for operational requirements.
The Act requires the company to notify all employees who are influenced by the retrenchment process in writing.
The SABC report was based on Pick n Pay’s letters to affected employees. It is not clear why the retailer allegedly denied the planned retrenchments.
In its latest results, Pick n Pay said it is creating a broadly equivalent number of new roles at a more junior level.
“We are asking staff to be flexible on the roles they will perform in the future,” it said in a previous statement.
Although Pick n Pay did not clarify this statement, it may point to senior managers being demoted to junior roles if they want to keep their jobs.
Pick n Pay CFO Lerena Olivier said their employee restructuring is critical to their Ekuseni strategic plan.
“We have indicated that over the planned period of Ekuseni, we are planning R3 billion worth of savings,” Olivier said.
“The steps we have taken to date are very important in the execution of the employee restructuring plan.”
She added that the once-off costs related to retrenchments and voluntary severance packages are built into the programme.
Olivier said they could not disclose numbers related to the planned retrenchments and job cuts as they are in consultations with staff.
The retailer said it would be in a position to comment on the financial impact of these initiatives once they are complete.